Australian healthcare retailer Sigma Healthcare has withdrawn from discussions to acquire the British pharmacy chain Boots, a deal valued at approximately £7.5 billion ($10 billion). The announcement, made on June 15, followed Sigma’s review of the potential acquisition, which it concluded did not align with its strategic and capital investment objectives.

Boots, founded in Nottingham in 1849, operates around 1,800 stores across the UK and is currently owned by US private equity firm Sycamore Partners. Sycamore acquired Boots’s parent company, Walgreens Boots Alliance, last year for $23.7 billion. The private equity group is reportedly considering several options for Boots’s future, including a possible initial public offering (IPO) on the London Stock Exchange valued at around £7 billion, which remains its preferred strategy.

Despite stepping back from the acquisition, Sigma reaffirmed its commitment to expanding its footprint in the UK and other international markets. The Australian company, which has a market capitalization of about A$33 billion (£24.5 billion) and operates over 1,200 pharmacies across Australia, highlighted international growth as one of its four key strategic pillars. It said it would continue to explore opportunities, including potential acquisitions, that fit its long-term goals and deliver sustainable returns.

Boots recently reported strong financial performance prior to the private equity takeover. For the fiscal year ending in August, profit before tax in the UK arm rose by 25 percent to £337 million, with revenues reaching £7.5 billion, a 3.2 percent increase year-on-year. Comparable retail sales for the group increased by 5.8 percent, supported notably by growth in beauty product sales.

Industry observers noted that Sigma’s shareholders appeared to welcome the decision to halt talks. Marc Jocum, an investment strategist at Global X ETFs, suggested that Sigma’s investors preferred a focus on executing existing growth opportunities rather than pursuing a large-scale acquisition.

In parallel, Sycamore has reportedly engaged in discussions with the Canadian Weston family, owners of supermarket chain Loblaws and former operators of Selfridges in the UK, about a possible sale of Boots. The company is also preparing for a potential London listing next year, which could provide another avenue for monetizing the asset.

Boots is set to be led soon by Alex Baldock, the current chief executive of Currys, who will take over as the new chief executive. Baldock is credited for turning around Currys during his eight-year tenure at the electronics retailer. The transition comes at a time when Boots navigates ongoing changes in the retail pharmacy sector amid evolving consumer behaviors and market pressures.